FLEX

A month has gone by since the last earnings report for Flex (FLEX). Shares have added about 3% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Flex due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Flex Ltd. before we dive into how investors and analysts have reacted as of late. FLEX Q1 Earnings Beat on CPI Strength Flex reported first-quarter fiscal 2027 adjusted earnings of $1.00 per share, up 38.9% year over year. The figure beat the Zacks Consensus Estimate of 93 cents by 7.5%. Revenues advanced 20.6% to $7.93 billion and topped the consensus mark of $7.58 billion by 4.6%. Broad-based segment growth, led by a 35% expansion in Cloud and Power Infrastructure, supported the results. FLEX Gains From All Three Segments Regulated Manufacturing Solutions revenues rose 12% year over year to $2.67 billion. Industrial demand benefited from energy infrastructure and warehouse automation, while connected medical devices supported Healthcare.Integrated Technology Solutions revenues increased 20% to $3.06 billion, aided by stronger advanced networking demand. Cloud and Power Infrastructure generated $2.20 billion, supported by robust demand across Power and Cloud & Cooling. Cloud and Power Infrastructure adjusted operating income rose 38% to $214 million, with margin increasing 20 basis points to 9.7%. Regulated Manufacturing Solutions income climbed 40% to $176 million, while Integrated Technology Solutions income advanced 21% to $158 million. Flex Expands Margins on Favorable Mix Adjusted gross profit increased 28% to $761 million. Adjusted gross margin expanded 50 basis points to 9.6%, reflecting the benefit of the company’s mix and operating execution. Adjusted operating income climbed 35% to $534 million, while adjusted operating margin improved 70 basis points to 6.7%. GAAP selling, general and administrative expenses rose to $334 million from $233 million. Legal and other charges totaled $67 million, including $53 million primarily tied to the planned spin-off and $14 million of acquisition costs. Cash Flow Reflects Heavy Investment Cash provided by operating activities was $276 million, down from $399 million a year earlier. Changes in working capital and other items used $149 million against a $65 million contribution in the prior-year quarter. Net capital expenditures were $235 million, leaving free cash flow of $41 million. Free cash flow included a $24 million negative impact from separation costs related to the Cloud and Power Infrastructure spin-off. Flex’s Balance Sheet Changes With Deal Activity Cash and cash equivalents increased to $2.84 billion as of June 26, 2026, from $2.39 billion at fiscal 2026-end. Long-term debt rose to $5.22 billion from $3.75 billion over the same period. The quarter included $1.13 billion of cash used for business acquisitions and $90 million of proceeds from divestitures. Flex raised $2.83 billion through bank borrowings and long-term debt and repaid $1.39 billion of borrowings and other financing liabilities. Q2 Guidance For the second quarter of fiscal 2027, FLEX expects revenues of $7.95-$8.25 billion. Adjusted operating income is projected between $535 million and $565 million, with adjusted earnings of $1.00-$1.07 per share. Management expects Regulated Manufacturing Solutions revenues to rise in the mid-single to high-single digits. Integrated Technology Solutions is projected to grow in the high-single to low-double digits, while Cloud and Power Infrastructure is expected to increase 45-55%. Fiscal 2027 Outlook Flex raised its fiscal 2027 revenue guidance to $33.7-$35.2 billion from $32.3-$33.8 billion. The adjusted operating margin outlook was tweaked to 7.0-7.2% from 7.0-7.1%. Adjusted earnings guidance was raised to $4.42-$4.74 per share from $4.21-$4.51. The company now expects Cloud and Power Infrastructure revenues to grow 65-75%, while free cash flow conversion is projected at roughly 40%, down from about 60% due to one-time separation costs. It turns out, estimates revision have trended upward during the past month. Currently, Flex has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Flex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Flex belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, Teradyne (TER), has gained 1.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Teradyne reported revenues of $1.33 billion in the last reported quarter, representing a year-over-year change of +103.9%. EPS of $2.47 for the same period compares with $0.57 a year ago. For the current quarter, Teradyne is expected to post earnings of $2.03 per share, indicating a change of +138.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.7% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Teradyne. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flex Ltd. (FLEX) : Free Stock Analysis Report Teradyne, Inc. (TER) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Looking back on electronic components & manufacturing stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Flex (NASDAQ:FLEX) and its peers. The sector could see higher demand as the prevalence of advanced electronics increases in industries such as automotive, healthcare, aerospace, and computing. The high-performance components and contract manufacturing expertise required for autonomous vehicles and cloud computing datacenters, for instance, will benefit companies in the space. However, headwinds include geopolitical risks, particularly U.S.-China trade tensions that could disrupt component sourcing and production as the Trump administration takes an increasingly antagonizing stance on foreign relations. Additionally, stringent environmental regulations on e-waste and emissions could force the industry to pivot in potentially costly ways. The 10 electronic components & manufacturing stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 4% while next quarter’s revenue guidance was 6% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.3% since the latest earnings results. Originally known as Flextronics until its 2016 rebranding, Flex (NASDAQ:FLEX) is a global manufacturing partner that designs, engineers, and builds products for companies across industries from medical devices to solar trackers. Flex reported revenues of $7.93 billion, up 20.6% year on year. This print exceeded analysts’ expectations by 5.4%. Overall, it was an exceptional quarter for the company with revenue guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EPS guidance for next quarter estimates. "This quarter reflects the continued execution of the strategy we've advanced over the last several years. From joining the S&P 500 to expanding our role in AI infrastructure, we've strengthened our position in attractive growth markets. Looking ahead, we're confident both Flex and SpinCo have the leadership, capabilities, and focus to capitalize on the significant opportunities in front of them," said Revathi Advaithi, CEO of Flex. Flex scored the highest full-year guidance raise but had the weakest guidance update of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 5.8% since reporting and currently trades at $106.73. We think Flex is a good business, but is it a buy today? Read our full report here, it’s free. With over 90 years of connecting the world's technologies, Amphenol (NYSE:APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry. Amphenol reported revenues of $8.76 billion, up 55% year on year, outperforming analysts’ expectations by 5.6%. The business had an incredible quarter with revenue guidance for next quarter exceeding analysts’ expectations. Amphenol delivered the fastest revenue growth in the group. The market seems happy with the results as the stock is up 8.3% since reporting. It currently trades at $155.75. Is now the time to buy Amphenol? Access our full analysis of the earnings results here, it’s free. With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE:ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications. Rogers reported revenues of $216.8 million, up 6.9% year on year, exceeding analysts’ expectations by 0.8%. Still, it was a mixed quarter as it posted a significant miss of analysts’ EPS estimates. Rogers delivered the weakest performance against analyst estimates and slowest revenue growth among its peers. Interestingly, the stock is up 3.2% since the results and currently trades at $122.95. Read our full analysis of Rogers’s results here. Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE:COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing. Coherent reported revenues of $2.05 billion, up 33.7% year on year. This number beat analysts’ expectations by 2.9%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations. The stock is down 23.4% since reporting and currently trades at $272.50. Read our full, actionable report on Coherent here, it’s free. As one of the world's largest printed circuit board manufacturers with facilities spanning North America and Asia, TTM Technologies (NASDAQ:TTMI) manufactures printed circuit boards (PCBs) and radio frequency (RF) components for aerospace, defense, automotive, and telecommunications industries. TTM Technologies reported revenues of $1.00 billion, up 37.4% year on year. This print surpassed analysts’ expectations by 4.8%. It was a stunning quarter as it also produced a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations. TTM Technologies scored the highest guidance raise of the whole group. The stock is down 18.3% since reporting and currently trades at $107.18. Read our full, actionable report on TTM Technologies here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Flex stock has delivered a very large 5 year return, yet current valuation checks and intrinsic value estimates still point to upside relative to the share price. After such a strong period, investors are weighing how much of the AI infrastructure story is already reflected in where Flex trades today. Over 5 years, Flex has returned about 8.4x on an absolute basis, which puts extra focus on whether that pace is supported by current cash flow expectations. Growth expectations around Flex's AI focused power and data center infrastructure can support higher cash flow assumptions, while execution risks around the planned separation of the cloud and power infrastructure business may affect how reliably those cash flows materialise. Flex screens as undervalued on both a Discounted Cash Flow (DCF) intrinsic value estimate and market multiples, yet its broader checks are mixed, with the company passing 4 of 6 valuation tests on this score. The key question for investors is whether Flex's current price still offers a reasonable margin between the market value and the intrinsic value indicated by these models. Flex delivered 136.1% returns over the last year. See how this stacks up to the rest of the Electronic industry. The Discounted Cash Flow (DCF) model values Flex by projecting future free cash flows and discounting them back to today. Flex generated about $960 million of free cash flow over the last twelve months, and the model assumes these cash flows continue to grow rather than shrink, supported by the company’s current project pipeline. Based on these assumptions, the DCF points to an estimated intrinsic value of about $201 per share, which implies the stock is 39.2% undervalued relative to the current price. Because the recent Q1 fiscal 2027 results and upgraded guidance are tied directly to AI infrastructure demand, the raised outlook helps explain why the cash flow projections embedded in the model remain supportive of a higher value. Overall, the discounted cash flow analysis suggests Flex stock currently appears undervalued relative to the cash flows it is expected to generate. Our Discounted Cash Flow (DCF) analysis suggests Flex is undervalued by 39.2%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Flex. P/E is a useful check for Flex because earnings are a key focus for many investors in established hardware and electronics providers. Flex currently trades on a P/E of about 46.5x, which sits above the electronic industry average of 31.9x and also above the peer group average of 41.8x. On those simple comparisons, the stock does not screen as cheap. The fair P/E that accounts for Flex's size, margins and risk profile is estimated at about 64.7x. That is higher than both the current multiple and the broader industry averages. This suggests the stock may not be fully pricing in the earnings profile implied by that framework. Together with the cash flow work, this relative gap indicates Flex screens as undervalued on an earnings basis, even after the recent enthusiasm around AI infrastructure. Overall, Flex stock appears undervalued on the P/E multiple when compared with this fair value benchmark. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Flex are designed to connect these valuation checks with the underlying assumptions that would need to hold for Flex's stock to be worth materially more or materially less than today's price, and they sit on Simply Wall St's Community page. Instead of stopping at a single P/E or DCF output, they unpack the growth, margin and earnings paths that those numbers rest on so you can monitor whether the real world is matching that implied future. One of the top community narratives on Flex: 40% undervalued Read one of the top narratives on Flex Do you think there's more to the story for Flex? Head over to our Community to see what others are saying! For Flex, both the Discounted Cash Flow (DCF) intrinsic value estimate and the earnings multiple work currently point to the stock as undervalued, even after a very large 5 year share price move. The broader checklist is mixed rather than uniformly strong, which suggests the apparent discount may partly reflect the execution risk around separating the cloud and power infrastructure business. The crux from here is whether Flex can convert AI related power and data center demand into dependable cash flows without major disruption. If that execution stumbles, the current discount could prove justified rather than an opportunity. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FLEX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:30 a.m. ET Chief Executive Officer - Revathi Advaithi Chief Financial Officer - Kevin S. Krumm Chief Commercial Officer - Michael Hartung Senior Vice President, Global Investor Relations and Public Relations - Michelle Simmons Operator: Thank you for standing by. Welcome to Flex's First Quarter Fiscal 2027 Earnings Conference Call. Presently, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. This call is being recorded. I will now turn the call over to Mrs. Michelle Simmons. Ms. Simmons, you may begin. Michelle Simmons: Good morning. And thank you for joining us today for Flex's first quarter fiscal 2027 earnings conference call. With me today is Revathi Advaithi, our Chief Executive Officer; Kevin S. Krumm, our Chief Financial Officer; and Michael Hartung, our Chief Commercial Officer. Slides for today's call as well as a copy of the earnings press release are available on the Investor Relations section at flex.com. Call is being recorded and will be available for replay on our corporate website. Today's call contains forward-looking statements, which are based on current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. These statements reflect expected results for the full fiscal year and did not give effect to the planned spin-off of the cloud and power infrastructure segment. For a full discussion of these risks and uncertainties, please see the cautionary statement in our presentation press release, or in the Risk Factors section in our most recent filings with the SEC. Note, this information is subject to change, and we undertake no obligation to update these forward-looking statements. Please note, all growth metrics will be on a year-over-year basis unless stated otherwise. Additionally, all results will be on a non-GAAP basis unless we specifically state it is a GAAP result. The full non-GAAP to GAAP reconciliations can be found in the appendix slides of today's presentation as well as in the summary financials posted on the Investor Relations website. Now I would like to turn the call over to our CEO. Revathi Advaithi: Good morning, and thank you, Michelle. In Q1, our teams delivered another exceptional quarter while continuing to prepare two industry-leading companies for the next phase of growth as standalone businesses. We delivered strong revenue growth, margin expansion across all three segments, and record adjusted earnings per share of $1.00. Our cloud and power infrastructure segment grew 35% year-over-year And as we stated before, our investments in this are on track to drive accelerated growth and margin expansion in the second half of the fiscal year. We also saw strong growth in our communications and industrial business units driven by high-value markets such as networking, automation and energy infrastructure. Now we are in the midst of a generational build-out driven by AI and demand is not slowing down. We have built two focused companies to win in the AI era and these results reflect the strength of our strategy. Our results also reflect our focus on long-term execution. Our addition to the S&P 500 last month reflects our progress over the last several years and the enduring strength of our strategy. We also continue to build momentum in some of our fastest growing markets, expanding our partnership with Cerebras to scale manufacturing of the CS-3, one of the world's most advanced AI accelerator systems right here in the United States. We also launched a new liquid cooling solution through our JetCool and showcased our next-generation power and infrastructure technologies at Computex. As we continue executing our long-term strategy for both Flex and SpinCo, I want to reiterate our vision for both companies. We have built two great businesses that are entering different phases of growth. The spin allows each company to sharpen its strategic focus, align capital allocation with its growth priorities, and create greater value for customers and shareholders. SpinCo requires a capital allocation framework designed for rapid growth as demand for AI infrastructure accelerates. Many people still think about AI as a compute story. I think it is increasingly becoming an infrastructure story and more specifically a power story. AI may live in the cloud, but the infrastructure behind it is very physical. It must be built, powered, cooled, integrated, and deployed at scale. As AI scales, the constraint is no longer just the chip. it is everything around the chip. Power, cooling, electrical systems, and ultimately, the grid capacity. That is the challenge customers are trying to solve today. We saw this coming years ago, and That is why we invested in power and thermal management technologies long before AI became front-page news. What started inside Flex is set of businesses supporting the next-generation of data centers has evolved into a leading solutions provider. I want to be very clear. SpinCo is not a data center components company. it is a digital and electrical infrastructure company built to help customers solve the power cooling and scaling challenges that come with AI. That is where we believe SpinCo is uniquely positioned to excel. We see our ability to bring together power thermal management and compute technologies combined with the ability to deploy these capabilities at global scale as a true differentiator in this space. We have spent years working alongside the world's leading technology company as they design, build, and expand critical infrastructure. That combination of power expertise, systems integration, and execution is difficult to replicate. I would say we are still early, We believe we are at the beginning of one of the largest electrical transformations happening today. What is happening in the data centers is just the starting point. As AI scales, demand will extend far beyond compute driving investment across power systems cooling technologies, electrical infrastructure, and ultimately, the grid itself. That is why we do not view this as a short-term investment cycle. The work required to power the next-generation of AI will take years. Creating ongoing opportunity across the broader electrical ecosystem with a very long tail. We are building SpinCo to lead that transformation. At the same time, Flex is exceptionally well positioned to drive long-term value creation as a leading global manufacturing platform. Following the separation, Flex will remain a global manufacturing leader with a proven playbook and strategy with deep customer relationships across diversified end markets and exposure to attractive long-term secular growth trends. These include healthcare, where an aging population and increasing prevalence of chronic disease are driving demand for medical devices and drug delivery solutions. And robotics and warehouse automation, where regionalization and labor shortages support meaningful operations opportunities for continued growth. While SpinCo will focus on digital and electrical infrastructure, Flex will continue to benefit from pull-through demand in data centers, providing contract manufacturing services in the advanced networking and energy infrastructure markets. What remains underappreciated is the strength of the Flex portfolio and the related opportunity ahead. The same disciplined playbook that has driven our transformation over the last seven years will continue to guide Flex as it enters this next phase of growth. Ultimately, we are creating two distinct and focused leaders. Each with the scale strategy, and opportunity to succeed on its own. Now turning to our transaction update on slide 6, our dedicated separation management office and cross-functional teams continue to make tremendous progress towards the separation, and they are on track for tax-free spin-off in the first quarter of calendar 2027. Today, we are also pleased to announce additional appointments for both SpinCo and Flex, effective upon completion of the separation. Thanks to the strong bench and depth of expertise we have built at Flex in recent years, we have strong leadership teams in place for both companies ready to execute from day one. Providing confidence, clarity, and continuity for our customers, employees, and shareholders. For more details on the extended leadership teams of each company, please refer to the press release we issued this morning. While it is certainly an exciting and dynamic time at Flex, we are executing from a position of strength. Our teams are winning by delivering incredibly well for our customers and at the same time executing with discipline to deliver exceptional results. We are excited about what is ahead. And we look forward to sharing more in the months to come including at our Investor Day on November 10, where we will provide additional details on the path forward for both companies. With that, I will turn the call over to Kevin, who will walk through the financials in more detail. Kevin S. Krumm: Thank you, Revathi, and good morning, everyone. I am honored to be a part of this exciting journey and to work alongside both teams during this transformative period. It has been an incredible journey so far, and I am energized about the opportunities in front of these businesses. I will now review our results for the first quarter fiscal year 2027, which reflects strong execution as we continue preparing for the upcoming spin-off of our cloud and power infrastructure segment. I will start with our key financials on slide 8. First quarter revenue came in at $7.9 billion up 21% year-over-year. Adjusted gross profit totaled $761 million and adjusted gross margin improved to 9.6%. Up 50 basis points from the prior year. Adjusted operating profit was $534 million up 35% year-over-year with adjusted operating margins at 6.7% up 70 basis points from the prior year driven by business mix and underlying productivity improvements. Finally, earnings per share for the quarter increased to $1.00 per share up 39% year-over-year. Turning to our quarterly segment results on the next slide. Regulated Manufacturing Solutions revenue was $2.7 billion up 12% year-over-year driven by strength in industrial. Adjusted operating income was $176 million and adjusted operating margin was 6.6%. Up 130 basis points year-over-year driven by the aforementioned strong performance in industrial. Revenue from Integrated Technology Solutions segment totaled $3.1 billion an increase of 20% year-over-year driven by exceptional growth in communications. Adjusted operating income was $158 million adjusted operating margin was 5.2%. Up 10 basis points year-over-year driven by the strong performance in communications and offset by weakness in consumer-related end markets. Finally, cloud and power infrastructure revenue totaled $2.2 billion up 35% from the prior year driven by strong growth in power as cloud and cooling continues to ramp new programs. Adjusted operating income was $214 million and adjusted operating margin was 9.7%, up 20 basis points year-over-year driven by growth and margin expansion in power. Moving to cash flow on slide 10, free cash flow in the quarter was $41 million. free cash flow was negatively impacted by one-time cash costs of $24 million driven by activity related to the announced spin-off. Q1 inventory was up 10% sequentially and 24% year-over-year largely driven by revenue growth. Inventory net of working capital advances was 56 days. An increase of one day from the prior year. First quarter net CapEx totaled $235 million or approximately 3% of revenues. Turning to our updated outlook on slide 11. For fiscal year 2027, our expectations are the following. Revenue to be between $33.7 billion and $35.2 billion up 23% at the midpoint. Adjusted operating margin to be between 7.7% and 8.2%, an increase of approximately 80 basis points year-over-year at the midpoint. We expect an adjusted tax rate of approximately 21%. We expect adjusted EPS to be between $4.42 and $4.74 a share. Up 39% at the midpoint. Finally, we expect CapEx to be in the range of $1.5 billion to $1.6 billion As a reminder, our prior guidance for free cash flow conversion of 60% excluded costs associated with the spin-off of our CPI segment. Incorporating costs associated with the spin-off, we now expect free cash flow conversion to be approximately 40%. Moving to our updated fiscal year 2027 segment outlook. For RMS, we expect revenue to be up mid-single digits to high-single digits due to continued strength in high-value end markets within industrial. Including warehouse automation, robotics, and energy infrastructure. For ITS, we expect revenue to be up high-single digits to low-double digits driven by continued strong performance in communications. And for CPI, we expect revenue to be up 65% to 75% driven by both cloud and power with power's growth rate exceeding cloud. Finishing off with our guidance for the second quarter on slide 13. We expect RMS revenue to be up mid-single digits to high-single digits on continued strength in industrial. We expect ITS revenue to be up high-single digits to low-double digits on continued strength in communications. Offset by weakness in consumer-related end markets. We expect CPI revenue to be up 45% to 55% as new programs continue to ramp in both cloud and power. For total Flex, we expect revenue in the range of $7.95 billion to $8.25 billion up 19% at the midpoint with adjusted operating income between $535 million and $565 million. Interest and other expense is estimated to be around $58 million and the adjusted tax rate to be around 21%. Lastly, we anticipate adjusted EPS to be between $1.00 and $1.07 per share, up 32% at the midpoint based on approximately 375 million weighted average shares outstanding. In summary, we are off to a strong start for fiscal year 2027. And we are well positioned to deliver upon the commitments we made at the beginning of the year. With that, I will now turn the call back over to the operator to begin Q&A. Operator: Thank you. We will now be conducting a question-and-answer session. Our first question today is coming from Ruplu Bhattacharya from Bank of America. Your line is now live. Ruplu Bhattacharya: Hi, thanks for taking my questions. Maybe with you, first question is on margins in the CPI segment. Looks like revenues grew sequentially, but op margin was slightly lower, maybe 20 bps Is that because of program ramps that you are focused on? And in a in a broader sense, can you talk about growth drivers for margins in this segment? Power has good margins, but today lower than some of its peers. So how do you plan to grow margins in the power segment? And then for compute, what guardrails do you have to make sure margins remain within your target range as some AI projects could have lower margins? And I have a follow-up. Thank you. Revathi Advaithi: Yeah, Ruplu, thanks for that question. I would say that margins in CPI are pretty much on track with the guidance we gave for the quarter and the year. We said that in the CPI segment that the revenue is kind of back-half loaded. We have been making investments in that. And then we also said that we expect to have at least 100 basis points improvement in margin in the CPI segment for the year from a year-over-year perspective. And we are on track with that. So feel very good about that. I would say what guides margins for this segment, obviously, on the compute side, we have been executing on that strategy for a while, and we are fairly mature in these. When there are new programs, which there are always new programs, initially, there is some investment. But when the program matures, then the margin flow-through rate is pretty good. So those ups and downs in the cloud side and the compute integration side as part of the game. But as you have seen in our full-year results, typically, that through the year, we do pretty well in terms of both revenue and our margin. I would say on the power side, we have said that, hey. We have built the power business through a whole bunch of acquisitions. Which requires investment, particularly when these businesses are growing at 70%-plus. So we are making those investments. Investments, and that drives kind of requirement for, the margin to be slightly muted compared to our peers, but we are very comfortable with moving it in the direction of where the peers in the electrical infrastructure are. I would say, Ruplu, in summary, CPI is absolutely where we said the quarter would be and where the guide would be for the year, and we are on track to deliver the margin improvement just as we said for kind of our current fiscal year. Ruplu Bhattacharya: Okay. Thanks for the details there, Revathi. Ruplu Bhattacharya: The follow-up maybe is for Michael or for Kevin. When you think about the segments in RemainCo, the regulated markets and especially the ITS segments, Are you happy with the product portfolio? I mean, if the focus is on longer lifecycle, higher margin segments, is there more potential to do more pruning or more optimization of both the portfolio as well as the footprint. So how are you thinking about that as you look out over the next couple of years? Thank you. Michael Hartung: Yes. Good morning, Ruplu. Thanks for the question. I would say we are absolutely happy with where we are starting from in the business. And if you might recall, our strategy going forward will be to continue to emphasize the high-value growth markets that are tied to these longer-term secular trends And these markets exist in both the RMS business and the ITS business. So up to this point in time we have been deploying capital both human and financial towards the highest returns and that has been the data center The strategic clarity as a result of the spin enables us to provide greater focus on those high-value growth markets. In terms of optimization, a regular part of our process here in the business is to always look to optimize the portfolio. You have seen the benefits of that in our Q4 results, our Q1 results, and our guide, and we expect to continue to optimize the portfolio as we go forward in the theme of emphasizing high-value markets and deemphasizing low-value markets along the way. So short, really pleased with the starting point of where we jump off from on this business. Ruplu Bhattacharya: Thank you for all the details. Operator: Thank you. Our next question today is coming from Mark Delaney from Goldman Sachs. Your line is now live. Mark Delaney: Yes, good morning and thank you very much for taking the questions. I was hoping to start on CPI. I think the full-year guidance for CPI revenue implies second-half revenue is up closer to 100%, so some acceleration. I know the company has program wins as you were just describing, but can you speak more on your visibility into that acceleration for second-half? And on that kind of broader theme of visibility into the CPI growth, any change in your views for CPI into next year because I think you are expecting an acceleration to over 80% growth for fiscal 2028? Kevin S. Krumm: Mark, good morning. This is Kevin. From a CPI perspective, directionally the ramp that you were referring to is what is going to happen as we move through the year. So we started at 35% in Q1. We are guiding to 45% to 55% in Q2 and then still the 65% to 75% for the full-year. So certainly, strong growth in the back half of the year as you referenced. I would say from a visibility standpoint, we have talked about our demand see-through in this business and it remains strong. We are still at that 90%-plus booked business at this point. For the next three quarters. So we feel good and remain confident in our visibility around this business. I would say as we think about next year, while we are not going to guide to next year on a quarterly basis, the framework that we offered earlier in the year still holds and we expect the investments that we are making this year in CapEx and the ramp we see in the back half of the year to continue strong growth performance next year and our visibility next year still remains robust. Mark Delaney: That is helpful context. Mark Delaney: My other question was on cooling. And Revathi, you mentioned JetCool and so about cooling. So I was hoping you could give a bit more detail on how big that market might be for Flex today? And maybe more qualitatively, if you could speak around the traction that you are seeing in areas like cold plates and CDUs? Thank you. Revathi Advaithi: Yes. I would say, Mark, the market for cooling liquid cooling, as you are aware, is growing quite well, and the market size is increasing as more air cooling is getting replaced with liquid cooling. I would say our acquisition with JetCool, you know, really got us some cold plate capability at the industry-leading cold plate capability and then we had to develop and introduce CDUs into the market. We are in the process of qualifying those products with the right end customers to scale that business up. It also gave us kind of manufacturing capability and co-design capability with some who already have their cooling product that helps us co-design with them. The way I think about cooling in the CPI portfolio is that it is still nascent, and it will be a pretty big part of our growth strategy overall for CPI. Within the cloud segment. So we are pretty bullish about it. I would say, but there is work to be done in terms of scaling that business to where we need it to go. Mark Delaney: Thank you. Operator: Our next question today is coming from Timothy Long from Barclays. Your line is now live. Timothy Long: Thank you. Yes, just one and then a follow-up, if I could. On the communications business, it sounds like it was really strong. The outlook is very favorable there. Just give us a little bit of color on kind of visibility, sustainability of that strength. How broad-based is it in the customer base? And then I will come back with a follow-up. Thank you. Michael Hartung: Good morning, Timothy. Thanks for the question. Yes, we have identified within our communications business that our advanced networking business in particular is one of those high-value growth markets that we expect to drive growth over a sustained period in our business. And that is being positively influenced by pull-through demand from the data center. If you step back and think about this business, communications continues to be one of our largest, healthiest businesses in RemainCo going forward. It will continue to really spread across not just high-speed switches, but optical switches, network interface cards. So it is fairly broad-based within that advanced networking ecosystem. And very much tied to the sustained demand from the data center. Timothy Long: Okay. Great. Great. Timothy Long: And then maybe a follow-up for Revathi. You mentioned kind of being able to bundle or a little bit more and have a full solution power cooling rack. Could you just touch on kind of the I know it is early on the cooling side, but maybe just give us some examples or some thoughts of customer activity where you are seeing the benefit of having these multiple pieces? Revathi Advaithi: Yeah. I would say, Timothy, that, we are seeing it across multiple customers, hyperscalers without naming out any, would say that you can see that most customers now are quickly thinking about hey, we need to before we deploy the next-generation silicon, we need to be thinking about the power capability and power requirements. They are already thinking about what does life look like when we go to an SSD technology. So we are seeing a lot of conversations at a very high level and strategic level with customers on kind of silicon cooling, and power, how all that comes together for next-generation products, which we did not see two and three years ago. Because what customers do not want to be is in the situation they are today, where the power requirement becomes an issue, and then we are in a struggle to make sure that we have enough power for these data centers. So I would say in the last kind of few months, several hyperscaler customers at a very high level, we have had strategic conversations around power cooling and kind of thinking about next-generation silicon. And that really puts us in the unique position of one of the few people who are able to do this. So I feel pretty good that three years ago, we thought this is where it would go, but now the conversations are heading in that direction. I would say from a platform perspective, what we announced with NVIDIA, a few months ago in terms of developing an overall modular platform which encompasses everything that we do is a good example of a company who is thinking about it and moving it in that direction. Timothy Long: Okay. Thank you. Operator: Our next question today is coming from Joseph Cardoso from JPMorgan. Your line is now live. Joseph Cardoso: Hi, good morning and thank you for the question. Maybe just for the first one, relative to the CPI growth, outlook that you provided, maybe can you just discuss the constraints that you are seeing just given the current backdrop that we are in? Just interested in hearing potentially what is limiting you from calling for further upside here. And where things are maybe more acute in terms of the constraints that you guys are seeing? And how are you thinking about those trending going forward? And any levers you have internally in terms of how you are thinking about offsetting of And then I have a follow-up. Thank you. Revathi Advaithi: Yeah. Joseph, I will start by saying that our guide for CPI for the year was 70%. So growth year-over-year. So it is a pretty strong and robust number in terms of year-over-year growth. So we feel really good about that. I would say, we beat the midpoint of our guide for Q1. We said 30%; we came in higher than that. So obviously, the year is accelerating exactly like we planned and Q2 is higher than Q1, and we had clearly mentioned that this is back-half loaded. Which is mainly driven by the capacity investments we are making. We announced a big CapEx which involves pretty significant investment in terms of facilities, cooling infrastructure, manufacturing infrastructure, all of those are going in place. And that combined with the customer's generational shift in platforms is what has driven the way we have given our guidance for the full-year. So we feel very good about the 70% guide that we have given for this year and the 80% that we have given for next year because those are pretty significant numbers. Do not see any significant constraints per se other than putting the, capacity investments in place and making sure those factories are ramped up, which we know how to manage really well. So, Joseph, I feel really good about the guidance we gave, and we are on track to deliver that. Joseph Cardoso: That is great to hear. And then maybe just as my follow-up, you mentioned the engagement with Cerebras. I am not sure how much you can talk about it, but any way you can kind of frame out how representative this engagement is to Flex's broader AI accelerator opportunity? And really what I am trying to get at is, for example, is this mostly advanced manufacturing? Or are you also seeing some pull-through around power cooling in the rest of the portfolio there? Revathi Advaithi: Yeah. I would say we have talked, we have been quite public about and Cerebras has been public about our engagement with them, and we have-- I think there are videos by us and them in terms of our full engagement. We have been working on this a while, right, with them and I would say that it is definitely a cooling engagement because those go hand in hand. But it is also we are also working on things like next-generation power, which is things that we will be thinking about with them in the future. So it is a pretty holistic partnership with Cerebras. It is going extremely well. We are scaling up a lot for them. So I would say that this is a good example of us diversifying our hyperscaler involvement in our CPI business that we have talked about. It is a great example of scaling up with another customer. Joseph Cardoso: Thank you. Operator: Our next question is coming from Ruben Roy from Stifel. Your line is now live. Ruben Roy: Yes. Hi, thanks. First question, I had a follow-up on Timothy's question on ITS. Kevin, you mentioned advanced networking and we have got the guide moving higher for the year. Can you talk a little bit about some of the dynamics there? Are you seeing share gains in advanced networking versus just broader market growth, which we are hearing from a lot of your peers? And I guess the kind of the longer-term question is how you are thinking about durability into fiscal 2028 on that business? Thanks. Michael Hartung: Thanks for the question, Ruben. This is actually Michael. In terms of the communications business, and the underlying strength in the advanced networking business itself, First, it was a driver in our Q4 result. It was a big driver in our Q1 results and that strength is continuing into our Q2 guide and in our FY 2027. So we are seeing continued strength in that business. I would say it is a combination of two of the things that you mentioned. One is ongoing increased demand from the customers that we have had for a number of years in many cases and we are actually winning share in some of those product segments as well. So we have good diversity across a number of large OEMs in the advanced networking space. And we also cover a number of product categories as well from high-speed switching, to optical products to interface technologies as well. So I would say two things. One, yes, sustained demand in our advanced networking business, good diversity across customers, and good diversity across product segments as well. And we feel good about the durability into FY 2028 because it is all related to AI infrastructure spending. Right? So as that continues, right, you are going to continue to see this business ramp with that. Ruben Roy: Right. Thank you, Michael. Revathi, if I could follow up on further follow-up on the CPI discussion. And thinking through capacity adds and that type of thing. You talked a little bit about that in May. But 90 days later, can you give us an update on sort of installed capacity against sort of the large second half ramp? I do not know if you can give us a percentage or high level view on what is cost-qualified today or what you still have to commission towards kind of meeting the strong growth you are expecting in the second half? Thanks. Revathi Advaithi: Yes. Ruben, I would say we feel very good about our full-year plan here for this business. These capacity investments and movements have been going on for a bit. So it just did not start. You know, 90 days ago, we had been doing that before that. So feel very good about it. You can see that in the acceleration in Q2. Just like we planned. And then we see the back half pretty much going per plan. And most of the, you know, CapEx that we announced is for this acceleration in FY 2027 and 2028. We are installing that CapEx. I do not see any major concerns about, how that capacity installation is going. It is going really well. Flex knows how to do this extremely well. We run large projects well. And this is both in cloud and power. Our power business is also growing in the 70%-plus range. So feel very good about the progress in terms of both cloud and power. And feel very good about the guide for the year. We are on track for it. Definitely to the 70% or better than that. Ruben Roy: Thank you. Operator: Our next question today is coming from Luke Junk from Baird. Your line is now live. Luke Junk: Good morning. Thanks for taking the questions. To start with Revathi, it would just be great to get your updated perspective on the transition to high voltage, both 400-volt plus-minus and 800-volt and specifically, to the extent there might be any risk of delays or push out, just how we should think through what impacts might or might not be relative to the CPI guidance, I think especially for fiscal 2028? Thank you. Revathi Advaithi: Yeah. I would say first is on 400-volt, which is kind of the immediate programs that we are working on followed by 800-volt we feel very good about the progress on those programs. Do not see any major limitations, at least to the guide we have given for 2027 and 2028. We feel pretty good about that guide. You know, I am sure there is lots of conversations about, you know, component and all of that, but we have planned all of that in the guide we have given. And, you know, if anything, there should be some upside to that, I would say, as availability becomes better. But the technology transition itself is going well. We feel good about the pace of customers and how that is being deployed. So I would say, you know, we have mentioned this before. Flex is kind of the leader in the transition on that, but on the power side, and you know, I would say that our ability to develop and deploy that 400-volt technology followed by 800-volt is really, really strong. So I feel really good about that we are on track for it, and we will see kind of as we update our long-term guidance and at the Investor Day, we will give you some more clarity around that. Luke Junk: Okay. Yes, we look forward to that. For a follow-up, Revathi, I was hoping you could just double-click on the company's modular capabilities and CPI. Certainly, we are getting more questions about this. You outlined some pretty interesting capabilities in the past. Just wondering how that figures into the expanded infrastructure opportunity overall that you reviewed in the prepared comments. Revathi Advaithi: Yeah, I would say, Luke, when I think about modular, right, you can think about modular in terms of like I talked about earlier, the partnership we announced with NVIDIA, which is you know, putting everything in a modular capability and deploying a kind of mini data center. That is one way to think about modular. The other way to think about modular is you know, power businesses have been doing modular deployment for power for a long period of time, whether it is a new utility space or the data center space. And for that, we added capacity in Dallas, after our Crown acquisition. Now with EP acquisition, we are adding capacity in Iowa to really continue to drive that modular power business. So we are very mature in that, and if anything, that is growing pretty significantly. So I think about it in terms of the holistic, like, modular deployment, which is what people are doing in terms of IT deployment or power deployment. It should become a bigger and bigger part of, I would say, all customers' requirements. And if anything, I think we are fighting against capacity constraints in that space to do more of it. But it is the direction everyone is heading, Luke, because it is just so much easier to pick it up and deploy it at the customer site. Luke Junk: Thank you. Operator: Our next question today is coming from Steven Fox from Fox Advisors. Your line is now live. Steven Fox: Hi, good morning. I was wondering if you could do a deep dive into some of the industrial strength you mentioned. Much of it is cyclical versus secular and how, you know, what you are doing to continue to address that demand? And then I have a follow-up. Michael Hartung: Yes. Good morning, Stephen. This is Michael. Thanks for the question. I would say when you think about our industrial business that has been identified as one of the business units that will really be containing multiple high-value markets that will be our growth focus going forward. Within that group, you have two different markets that I would like to point out. The first one is around energy infrastructure. Now as you already know, we are spinning our power product portfolio into SpinCo and we are maintaining our contract manufacturing capability for that industry. And so we will be a contract manufacturer for things ranging from power generation, transmission, distribution, and storage. And that energy infrastructure business has great pull-through demand from not just data center infrastructure, but also utility-scale infrastructure as well. So we see sustained demand from that segment within industrial. On the other side, we have our robotics and warehouse automation business. And again, tied to the longer-term secular trend in this case around regionalization. As we talked about regionalization is accelerating and many of those regions are now suffering from things like wage inflation, labor scarcity, and they are on the constant search for productivity improvements. Our warehouse automation business is perfectly aligned to help solve those problems for our OEM partners. So both of those markets we have called out as being high-value growth markets and both are tied to these longer-term secular trends. We think are sustainable over the long term. Steven Fox: And just to be clear, Michael, right now you are saying that this is all more secular in nature than any kind of cyclical recovery? Michael Hartung: Yeah. We see this tied very much to an ongoing infrastructure build-out. Both directly with the energy infrastructure businesses and then supporting productivity over the long-term in our warehouse automation business. Steven Fox: Got it. Steven Fox: And then as a follow-up, can you give us an update on the Amazon partnership? You had a big commercial agreement announced, I guess, it is been over a year now. Maybe longer. And then how does that work out as you split the business? Is that all tied to one side of the business or another? Can you just sort of give us a feel for that too? Thank you. Kevin S. Krumm: Hey, Steve, this is Kevin. Good morning. Kevin S. Krumm: I will answer the last part of that question first, which is the benefit to the Amazon arrangement really is across all of our businesses. So you will see that both on the CPI business that we are spinning off, as well as the existing business that we have. And Michael talked about some of the end markets that we work in there. So I would say from that perspective it is broad across the Flex portfolio. From an update standpoint, there is really nothing to update. I would say that we will continue to assess the arrangement with them as we move through this year and get ready to spin the CPI business in early 2027. And when we have an update, of course, we will update everybody. Steven Fox: Thank you. Operator: Our next question today is coming from Steve Barger from KeyBanc Capital Markets. Your line is now live. Steve Barger: Thanks. Revathi, you talked about your first-mover advantage in terms of serving broad segments of the data center. It does look like other EMS companies are also expanding capabilities in a similar way. What percentage of your engagements are contracting for the power cooling and compute portfolio versus taking a more selective approach to your products and services? Revathi Advaithi: I would say, Steve, first is, when we are talking about other EMS companies moving into the same space, I think maybe there is some misconception around it because our power business is based on having true IP and product capability. It is not where we do contract manufacturing for end markets there. That will stay with kind of the base energy infrastructure business that Michael talked about. So I think there is some confusion around, kind of what the real capability is. So the real requirement in the power business is, you know, not just being able to develop products for what is needed, but then be able to integrate that in, like I talked about, with 400-volt design, 800-volt design, and then the future of solid-state that is going to be coming our way. So integrated design, like I had mentioned earlier in the call today, which is thinking about sidecars on power, cooling racks, and a fully integrated modular design is becoming a bigger and bigger conversation at very high levels in the hyperscalers. To be able to do that, you have to have true product technology. You need to be able to design in 400-volt and 800-volt design to be able to have those conversations. So, you know, I would say where I see the differentiation is we are an electrical player with true product capability, cooling player with true product, and then an integrated design capability including all of compute integration I would say I have not seen anybody just have that capability yet. Steve Barger: No. I agree. I do think you have a really good model. And I am just-- can you tell us are most of your conversations at a high level talking about taking that full suite of integrated products? Revathi Advaithi: I would say I would not say it is more about taking the full suite of integrated products, but it is about designing that full suite of integrated products. Which is kind of more important than anything else. Right? So that is how I see it. I want us to win in each individual category, Steve, whether it is cooling or sidecar or compute integration, or even just building and developing your metal for fabricating all of that. But I want to lead the technology conversation with our customers in terms of what does the future of power look like with your next-generation silicon? How can we cool it enough? What kind of cooling makes sense? Those are the conversations we are having, and I think that is the most important part of how we lead this conversation. Steve Barger: Thank you. Operator: We reached the end of our question-and-answer session. I would like to turn the floor back over for any further or closing comments. Revathi Advaithi: Thank you. We delivered another strong quarter and we are executing our proven strategy as we move towards the spin-off. As always, I want to thank our customers for their trust and partnership; of course, our shareholders for their support, and then the global Flex team for their continued dedication and contributions. We look forward to speaking with you again next quarter. Thank you, everyone. Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today. Goodbye. Before you buy stock in Flex, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Flex wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Flex. The Motley Fool has a disclosure policy. Flex (FLEX) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Flex Ltd. FLEX emphasized its expanding role in AI infrastructure during its first quarter of fiscal 2027 earnings call, highlighting demand for power, cooling and data center solutions as the key growth drivers. Management also raised its fiscal 2027 outlook, pointing to strong execution across segments while preparing for the planned separation of its Cloud and Power Infrastructure business. Chief executive officer Revathi Advaithi said Flex is positioned around the growing need for physical infrastructure supporting AI adoption, including power systems, cooling technologies and integrated deployment capabilities. Advaithi highlighted that the company’s Cloud and Power Infrastructure segment grew 35% year over year in the quarter, supported by strength in power and expanding cloud and cooling programs. The company also discussed its work with Cerebras to scale manufacturing of AI accelerator systems in the United States, along with broader efforts in advanced infrastructure solutions. Flex management said the planned tax-free spin-off of the Cloud and Power Infrastructure segment remains on track for the first quarter of calendar 2027. Advaithi said the separation is intended to create two focused companies with different capital allocation priorities and strategic objectives. The company stated that the remaining Flex business will continue focusing on manufacturing capabilities across healthcare, industrial markets, robotics and warehouse automation. Flex reported first quarter revenues of $7.93 billion, up 21% year over year, with adjusted operating margin improving to 6.7% from 6% in the prior-year period. Revenues exceeded the Zacks Consensus Estimate of $7.58 billion. Adjusted EPS reached a record $1, surpassing the Zacks Consensus Estimate of $0.93. Flex Ltd. price-consensus-eps-surprise-chart | Flex Ltd. Quote The Regulated Manufacturing Solutions segment benefited from industrial demand, while Integrated Technology Solutions growth was supported by communications strength. Flex increased its fiscal 2027 revenue outlook to $33.7 billion to $35.2 billion, representing 23% growth at the midpoint. Adjusted EPS guidance was raised to $4.42 to $4.74. Chief financial officer Kevin Krumm said Cloud and Power Infrastructure revenues are expected to grow 65% to 75% for fiscal 2027, driven by cloud and power demand. For the second quarter, management expects revenues between $7.95 billion and $8.25 billion, with adjusted EPS guidance of $1 to $1.07. A BofA Securities analyst questioned whether capacity additions and investments could limit Cloud and Power Infrastructure growth. Advaithi said the company remains on track with planned investments and expects margin improvement in the segment. A Goldman Sachs analyst asked about visibility into second-half acceleration. Krumm said Flex has more than 90% booked business visibility for the next three quarters. Management also discussed liquid cooling opportunities, noting that JetCool added cold plate capabilities while Flex continues qualifying cooling products with customers. Flex executives emphasized continued investment in advanced networking, energy infrastructure and automation markets. Michael Hartung, president and chief commercial officer, said these areas align with longer-term secular trends. Hartung noted that advanced networking demand remains broad across product categories, including high-speed switching, optical products and interface technologies. Management said industrial growth is being supported by energy infrastructure demand and warehouse automation needs tied to productivity improvements. Advaithi said Flex is entering the next phase of growth with two businesses designed around distinct opportunities, while maintaining operational discipline during the separation process. The company’s first-quarter results reflected improving margins, stronger AI infrastructure exposure and continued investment in growth markets. Management’s focus remained on executing current programs, expanding capacity and supporting customers across evolving infrastructure needs. Flex carries a Zacks Rank #2 (Buy), indicating favorable earnings estimate revision trends compared with stocks carrying lower-ranked ratings. The Style Score system provides additional views of stock characteristics, with higher grades representing stronger relative attributes. The stock has a Value Score of B, Growth Score of A, Momentum Score of B and VGM Score of A. Zacks notes that stocks with a Zacks Rank #1 (Strong Buy) or 2, when combined with a Style Score of A or B, have historically shown stronger performance characteristics, although the Zacks Rank can change as analysts update earnings estimates following quarterly results. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flex Ltd. (FLEX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $7.9 billion, up 21% year-over-year. Adjusted Gross Profit: $761 million. Adjusted Gross Margin: 9.6%, up 50 basis points from the prior year. Adjusted Operating Profit: $534 million, up 35% year-over-year. Adjusted Operating Margin: 6.7%, up 70 basis points from the prior year. Adjusted Earnings Per Share: $1, up 39% year-over-year. Cloud and Power Infrastructure Revenue: $2.2 billion, up 35% year-over-year. Free Cash Flow: $41 million, impacted by one-time cash costs of $24 million. Net CapEx: $235 million, approximately 3% of revenue. Fiscal Year '27 Revenue Outlook: $33.7 billion to $35.2 billion, up 23% at the midpoint. Fiscal Year '27 Adjusted EPS Outlook: $4.42 to $4.74, up 39% at the midpoint. Second Quarter Revenue Guidance: $7.95 billion to $8.25 billion, up 19% at the midpoint. Second Quarter Adjusted EPS Guidance: $1 to $1.07, up 32% at the midpoint. Warning! GuruFocus has detected 7 Warning Signs with BIIB. Is FLEX fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Flex Ltd (NASDAQ:FLEX) reported strong revenue growth of 21% year-over-year, reaching $7.9 billion in Q1 fiscal 2027. The company achieved record adjusted earnings per share of $1, up 39% year-over-year. The Cloud and Power Infrastructure segment grew by 35% year-over-year, with expectations for further growth and margin expansion in the second half of the fiscal year. Flex Ltd (NASDAQ:FLEX) has been added to the S&P 500, reflecting its progress and strategic strength. The company is well-positioned to benefit from long-term secular growth trends in healthcare, robotics, and warehouse automation. Free cash flow was negatively impacted by one-time cash costs of $24 million related to the announced spin-off. Inventory levels increased by 24% year-over-year, which could indicate potential inefficiencies or challenges in inventory management. The Integrated Technology Solutions segment faced weakness in consumer-related end markets, which offset some of the gains from communications. The company's free cash flow conversion guidance was reduced to approximately 40% due to costs associated with the spin-off. There are ongoing challenges related to capacity investments and ramping up manufacturing infrastructure for the Cloud and Power Infrastructure segment. Q: My first question is on margins in the CPI segment. Revenues grew sequentially, but operating margin was slightly lower. Is this due to program ramps? Can you discuss growth drivers for margins in this segment? A: Margins in CPI are on track with our guidance. We expect at least a 100 basis points improvement in margin for the year. On the compute side, new programs initially require investment, but mature programs have good margin flow-through. On the Power side, investments are needed due to acquisitions and growth, but we are moving towards peer-level margins. Q: Regarding the segments in RemainCo, especially the ITS segments, are you satisfied with the product portfolio? Is there potential for optimization? A: We are happy with our starting point and will continue to emphasize high-value growth markets tied to long-term trends. Optimization is a regular process, and we will continue to focus on high-value markets while deemphasizing low-value ones. Q: The full-year guidance for CPI revenue implies significant acceleration in the second half. Can you speak more on your visibility into this acceleration and any changes in your views for CPI into next year? A: We expect strong growth in the back half of the year, with 90% plus booked business for the next three quarters. Our visibility remains strong, and we expect continued growth next year, supported by current investments and ramp-ups. Q: Can you provide more detail on the cooling market and your traction in areas like cold plates and CDUs? A: The liquid cooling market is growing as air cooling is replaced. Our acquisition of JetCool has enhanced our capabilities, and we are qualifying products with customers. Cooling is a nascent but important part of our growth strategy within the cloud segment. Q: On the communications business, can you provide color on the visibility and sustainability of its strength? How broad-based is it in the customer base? A: Our advanced networking business is a high-value growth market, positively influenced by data center demand. It is broad-based across high-speed switches, optical switches, and network interface cards, and remains one of our largest, healthiest businesses. Q: Can you discuss the constraints you're seeing in the CPI growth outlook and any levers you have to offset them? A: Our guide for CPI growth is robust, and we are on track with capacity investments. We don't see significant constraints other than ensuring capacity is in place, which we manage well. Q: Can you elaborate on the engagement with Cerebras and how it represents Flex's broader AI accelerator opportunity? A: Our partnership with Cerebras involves manufacturing and cooling, with future work on next-generation power. It's a holistic partnership, scaling up well, and diversifying our hyperscaler involvement. Q: Can you update us on the Amazon partnership and how it fits into the business split? A: The Amazon arrangement benefits all our businesses, including CPI and existing segments. We will continue to assess the arrangement as we prepare for the CPI spin-off in early 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the record EPS and 21% revenue growth to a generational build-out in AI infrastructure, alongside strong performance in industrial and communications markets., shifting the narrative from a compute-only story to a physical infrastructure and power story. The Cloud and Power Infrastructure (CPI) segment's 35% growth was driven by the ramp of new programs in power and cooling, with management positioning the upcoming SpinCo as a digital and electrical infrastructure leader rather than a data center components company. Operational outperformance in the Regulated Manufacturing Solutions (RMS) segment was fueled by high-value industrial markets, specifically warehouse automation, robotics, and energy infrastructure. Strategic positioning focuses on solving the 'everything around the chip' challenge, utilizing years of investment in power and thermal management to address grid capacity and cooling constraints. The planned tax-free spin-off of the CPI segment is intended to allow both entities to align capital allocation with distinct growth priorities: rapid AI scaling for SpinCo and diversified global manufacturing for Flex. Management highlighted the addition to the S&P 500 as validation of their long-term execution and the enduring strength of their diversified portfolio strategy. Fiscal year 2027 guidance assumes a significant back-half acceleration in CPI revenue, with expectations for 65% to 75% growth driven by capacity investments and new program ramps. Management anticipates adjusted operating margin expansion of approximately 80 basis points year-over-year, supported by business mix shifts toward high-value power and networking solutions. The free cash flow conversion target was revised to approximately 40% to incorporate one-time cash costs associated with the CPI spin-off process. Strategic initiatives include expanding the partnership with Cerebras for AI accelerator manufacturing and qualifying new liquid cooling products like CDUs to capture the shift from air to liquid cooling. The separation remains on track for completion in the first quarter of calendar 2027, with an Investor Day scheduled for November 10 to provide detailed roadmaps for both companies. The company incurred $24 million in one-time cash costs during Q1 specifically related to the announced spin-off activities. Inventory levels increased 24% year-over-year, which management characterized as a necessary strategic move to support the projected revenue ramp in the second half of the year. Management flagged continued weakness in consumer-related end markets as a headwind within the Integrated Technology Solutions (ITS) segment. The transition to 400-volt and 800-volt power designs is identified as a critical technology pivot, with management factoring component availability into the fiscal 2028 trajectory and seeing no major limitations to the provided guidance. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects at least 100 basis points of margin improvement in CPI for the full year as new programs mature and the investment cycle for power acquisitions stabilizes. While power margins are currently lower than some electrical infrastructure peers due to high growth investments, the trajectory is aimed at matching peer levels as the business scales. Confidence in the 65% to 75% full-year CPI growth target is supported by over 90% booked business for the next three quarters. The ramp is contingent on the successful installation of previously announced CapEx for facilities and cooling infrastructure, which is currently proceeding as planned. Management argues that Flex is uniquely positioned because it owns true IP and product technology in power and cooling, rather than just providing contract manufacturing services. Strategic conversations with hyperscalers have shifted from simple component purchasing to integrated design discussions involving sidecars, cooling racks, and modular power deployment. Strength in the ITS segment is driven by pull-through demand from data centers for high-speed switches and optical products. Management believes this growth is durable into fiscal 2028 as it is tied to the long-term AI infrastructure build-out rather than a short-term cyclical recovery.

Interested in Flex Ltd.? Here are five stocks we like better. Flex delivered a strong first quarter, with revenue up 21% to $7.9 billion, adjusted operating margin expanding to 6.7%, and adjusted EPS rising 39% to $1. The Cloud and Power Infrastructure segment led growth, with revenue increasing 35% to $2.2 billion. Flex expects CPI revenue to grow 65%–75% in fiscal 2027 as AI-driven demand for power, cooling and electrical infrastructure accelerates. Flex raised its fiscal 2027 outlook and remains on track to spin off CPI as a standalone company in the first quarter of calendar 2027, projecting full-year revenue of $33.7 billion–$35.2 billion and adjusted EPS of $4.42–$4.74. Small Names, Big Impact: The Stocks Behind NVIDIA’s Rubin Flex (NASDAQ:FLEX) reported first-quarter fiscal 2027 results that included 21% revenue growth, expanding margins and record adjusted earnings per share, while management said the company remains on track to separate its Cloud and Power Infrastructure business into an independent company in the first quarter of calendar 2027. First-quarter revenue totaled $7.9 billion, up 21% from a year earlier. Adjusted operating profit rose 35% to $534 million, while adjusted operating margin increased 70 basis points to 6.7%. Adjusted earnings per share increased 39% year over year to $1. → This Tiny AI Supplier Could Be More Important Than the Chipmakers 2 Essential Data Center Solutions Providers Riding the AI Boom “In Q1, our teams delivered another exceptional quarter while continuing to prepare two industry-leading companies for the next phase of growth as standalone businesses,” Chief Executive Officer Revathi Advaithi said on the company’s earnings call. The Cloud and Power Infrastructure, or CPI, segment posted the fastest growth among Flex’s operating units. Revenue in the segment reached $2.2 billion, up 35% year over year, driven by growth in power products as cloud and cooling programs ramped. Adjusted operating income was $214 million, and the segment’s adjusted operating margin rose 20 basis points to 9.7%. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? This mid-cap tech stock just jumped 30%...and is still cheap Advaithi said AI infrastructure demand continues to extend beyond computing chips into power, thermal management, electrical systems and grid capacity. She described the planned SpinCo as a digital and electrical infrastructure company rather than a data-center component supplier. “As AI scales, the constraint is no longer just the chip. It’s everything around the chip: power, cooling, electrical systems, and ultimately, the grid capacity,” Advaithi said. → Innovative ETF Strategies That Are Paying Off This Summer The company said it is investing in capacity to support CPI’s growth and expects its investments to contribute to accelerated revenue growth and margin expansion in the second half of fiscal 2027. CFO Kevin Krumm said more than 90% of the next three quarters of business in the segment is booked, supporting the company’s visibility into the expected second-half ramp. Flex expects CPI revenue to increase 65% to 75% for the full fiscal year, with power growing faster than cloud. Management said the prior framework calling for CPI growth of more than 80% in fiscal 2028 remains intact. Management also said the CPI segment is expected to deliver at least 100 basis points of year-over-year margin improvement during fiscal 2027. Advaithi said new program ramps can initially require investment, while the power business is continuing to absorb investment needs following acquisitions and amid growth of more than 70%. Revenue from the Regulated Manufacturing Solutions, or RMS, segment rose 12% to $2.7 billion, led by industrial demand. Adjusted operating income was $176 million, while adjusted operating margin expanded 130 basis points to 6.6%. Integrated Technology Solutions, or ITS, generated revenue of $3.1 billion, up 20% from the prior-year period. The increase was driven by communications, though management said weakness in consumer-related markets partly offset that performance. ITS adjusted operating income was $158 million, and its adjusted operating margin improved 10 basis points to 5.2%. Chief Commercial Officer Michael Hartung said advanced networking remains a high-value growth market within communications and is benefiting from data-center-related pull-through demand. He said Flex is seeing sustained customer demand and share gains across products including high-speed switches, optical products and network interface technologies. For the business that will remain with Flex after the separation, Hartung said the company plans to emphasize high-value, longer-cycle markets while continuing to optimize its portfolio and reduce emphasis on lower-value markets. He pointed to energy infrastructure, robotics and warehouse automation as areas supported by longer-term trends. In industrial, management said its energy infrastructure manufacturing business is seeing demand from data-center and utility-scale infrastructure. The company also cited regionalization, labor scarcity and wage inflation as factors supporting warehouse automation demand. Flex said its separation management office and cross-functional teams are progressing toward a tax-free spin-off of CPI in the first quarter of calendar 2027. The company also announced leadership appointments for both Flex and SpinCo that will take effect when the separation is completed. Advaithi said the separation is intended to give each company a sharper strategic focus and capital-allocation approach tailored to its opportunities. SpinCo is expected to pursue rapid growth in AI-related infrastructure, while Flex will retain its global manufacturing platform and exposure to healthcare, automation, advanced networking and energy infrastructure. During the quarter, Flex expanded its partnership with Cerebras to scale U.S. manufacturing of the CS-3 AI accelerator system. Advaithi said the relationship includes manufacturing and cooling work and could involve next-generation power technology over time. Flex also introduced a liquid-cooling solution through JetCool and showcased power and infrastructure technologies at Computex. Management said liquid cooling remains a nascent but potentially important growth area within the cloud portion of CPI. Flex acquired cold-plate capabilities through JetCool and is qualifying coolant distribution units with customers, according to Advaithi. Flex raised its full-year fiscal 2027 outlook to revenue of $33.7 billion to $35.2 billion, representing 23% growth at the midpoint. The company expects adjusted operating margin of 7% to 7.2%, about 80 basis points higher at the midpoint than the prior year, and adjusted EPS of $4.42 to $4.74, up 39% at the midpoint. RMS revenue is expected to rise mid-single digits to high single digits. ITS revenue is expected to increase high single digits to low double digits. CPI revenue is expected to grow 65% to 75% for the full year. Capital expenditures are projected at $1.5 billion to $1.6 billion. Free-cash-flow conversion is now expected to be about 40%, including spin-off costs, compared with the prior 60% expectation that excluded those costs. For the second quarter, Flex forecast total revenue of $7.95 billion to $8.25 billion, representing 19% growth at the midpoint, and adjusted operating income of $535 million to $565 million. The company expects CPI revenue growth of 45% to 55% as new cloud and power programs continue to ramp. First-quarter free cash flow was $41 million, including $24 million of one-time cash costs tied to spin-off activities. Net capital expenditures totaled $235 million, or about 3% of revenue. Flex (NASDAQ: FLEX), formerly known as Flextronics, is a global provider of electronics manufacturing services (EMS) and original design manufacturing (ODM). The company offers end-to-end product lifecycle solutions including product design and engineering, prototyping, volume manufacturing, testing, and aftermarket services. Its offerings extend into supply chain management, component sourcing, logistics and distribution, and advanced manufacturing capabilities such as automation and digital manufacturing to support customers from concept through end-of-life. Flex serves a broad range of industries, including automotive, healthcare, industrial, communications, and consumer electronics, working with original equipment manufacturers (OEMs) and technology companies to accelerate time to market and manage complex supply chains. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Flex Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.